Alonso-Carrera, Jaime; Caballé, Jordi; Raurich, Xavier - Barcelona Graduate School of Economics (Barcelona GSE) - 2011
We analyze the transitional dynamics of a model with heterogeneous consumption goods. In this model, convergence is driven by two different forces: the typical diminishing returns to capital and the sectoral change inducing the variation in relative prices. We show that this second force a¤ects...